DRAM manufacturers in trouble

The DRAM industry is in hot water after falling chip prices caused by oversupply are gutting the industry. Some of them have been forced to rethink their market outlook for the rest of 2011.

According to Digitimes spot quotes for mainstream 2Gb DDR3 have dropped to below US$1 and eTT have fallen to $0.70. What is worse is that the ongoing downward trend is unlikely to reverse for a while.

One of the problems has been that people do not want to buy DRAM because of weak PC sales. Demand for tablet PCs and cloud servers is not large enough to keep up with supply growth.

Samsung has been pushing its shift to 20nm-class process technology to drive down production costs and mitigate ongoing problems in the DRAM industry. This has forced the others to follow, when most of them don't have much cash. Others are diversifying their product lines and slashing operating costs in a bid to save their bacon.